WASHINGTON - Applications for unemployment insurance among Americans increased last week, yet they stay at historically low levels despite the economic volatility stemming from the ongoing war in Iran.

The Labor Department announced Thursday that U.S. claims for unemployment benefits for the week ending May 9 surged by 12,000 to 211,000. This exceeded the 207,000 new claims projected by analysts polled by FactSet.

These weekly unemployment filings serve as a key measure of U.S. layoffs and offer a near real-time gauge of job market strength.

Even with minimal layoffs, the job market seems trapped in a "low-hire, low-fire" phase, according to economists. This has held the unemployment rate steady at 4.3%, but many job seekers face prolonged challenges in landing new positions.

Although employers surprisingly added 115,000 jobs in April, the Iran war has introduced significant doubt over the wider U.S. economy and employment landscape.

The Strait of Hormuz - through which one-fifth of global oil flows - stays shut. Oil prices have jumped over 50% since the war started in late February, pushing the national average gas price to $4.53 per gallon from under $3. These elevated costs strain household budgets and may deter companies from expanding payrolls.

Government data released this week indicated consumer inflation climbed 3.8% in April 2025, the sharpest rise in three years. Food costs have increased too, though they might not yet capture the full impact of surging energy prices tied to the Iran war, per analysts.

Separate figures showed wholesale prices soaring 6% year-over-year, the steepest in over three years. The producer price index from the Labor Department - a precursor to consumer inflation - leaped 1.4% from March to April, the largest monthly increase in more than four years.

This occurs as U.S. inflation exceeds the Federal Reserve's 2% target. Two weeks back, the Fed held its benchmark rate steady, pointing to Middle East tensions and persistent inflation as sources of uncertainty.